VinFast Asks India to Cut EV Import Duty as Plant Construction Starts

News Highlights

• The manufacturing facility will have a yearly capacity of 150,000 units.
• The auto giant is also planning to introduce its two-wheeler models in India in the coming days.

Vietnam-based EV manufacturer VinFast has recently asked the Indian government to reduce its import duties on cars for two years. According to reports, the auto giant stated that if import duties are reduced, buyers will get to know VinFast's products while the brand’s manufacturing plant in the country becomes operational. The automaker is aiming to establish its presence in the Indian automotive market. Earlier, the American EV giant Tesla had also asked India to reduce import duties but faced a denial from the government.

On February 25, 2024, the EV manufacturer had an opening ceremony for its manufacturing site in India, which was attended by Minister for Industries T. R. B. Rajaa, Tamil Nadu Chief Minister MK Stalin, and Industries Secretary V. Arun Roy. The EV plant is situated in Thoothukudi, Tamil Nadu. The facility will have a yearly capacity of 150,000 units, and it is likely to create 3,000-3,500 job opportunities in the state. The electric vehicles manufactured in India will be sold both in the domestic and in global markets.

As per the Memorandum of Understanding (MoU) signed between the company and the Tamil Nadu government, for the first five years, VinFast will invest USD 2 billion (around INR 16,638 crore), with an initial investment of USD 500 million (around INR 4,160 crore) for the first five years. The CEO of VinFast, Pham Sanh Chau, has hinted that production is likely to start by mid-2023.

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The Vietnamese EV manufacturer has requested that the government reevaluate the 100 percent import tax on fully assembled electric vehicles (EVs). According to a government official, the government is considering the petitions, but no firm decision has been made yet. The brand has already started collaborating with around 55 Indian dealers to establish a strong sales network. The auto giant is also working to introduce its two-wheeler models in India in the coming days.

The Indian EV market accounted for only 2 percent of complete automobile sales last year, as it is still nascent. Nonetheless, the federal government is aggressively developing initiatives to attract EV manufacturers, with the goal of attaining a 30 percent market share for electric vehicles by 2030.

The CEO of VinFast India, Pham Sanh Chau, commented on establishing a manufacturing plant in the country, stating that "By establishing an integrated electric vehicle facility, the company's commitment to job creation, green transportation, and strategic partnerships solidifies VinFast’s position as a major player in the electric vehicle industry. This milestone strengthens the bonds between the robust economies of Vietnam and India, and underscores VinFast's dedication to a zero-emission transportation future, setting the stage for economic growth, innovation, and environmental sustainability in the region."